Thursday, May 14, 2009

What happened to world trade?

When you look at recent world trade numbers, then this recession starts to look like a rerun of the great depression. In the first quarter of this year, the quarterly contraction on trade volumes could be as high as 12 percent.

For the "anti-globalization, free trade is bad" crew, recent trade data also points to that old adage - "be careful what you wish for".

Emerging market countries are finding that export demand from advanced economies is falling, and reducing foreign exchange earnings. In turn, this reduces the capacity of emerging markets to import goods, both from each other and from advanced economies. Globalization is in retreat; and protectionism is on the rise.

So will the world become a happier place as the anti-globalization movement promised? I don't think so.

6 comments:

Funny, I don't remember feeling terribly happy living with the effects of globalization before the crash. I suspect the people thrown off their land so crops can be grown for export to rich countries aren't too happy either.

In the long run, I look forward to being able to buy things made in Britain instead of China. And the end of stupid things like NZ lamb in a country with thousands of sheep....

Globalization for anything more than financial and software services assumes very low transport (energy) costs. As peak oil bites we will see a growing proportion of food grown more locally - if we can!

At present we produce just 11% of the fruit we consume and 58% of the vegetables we consume. Sure we can plant more vegetables but apple trees, pear trees etc take a whole lot longer to be productive.

In the UK, food cost has never ever been so small relative to an average salary as it has been in recent years.

Sorry Carol, but there's nothing we are getting from China today that is likely to be manufactured here again any time soon. Their cost of production is so low that the effect the industrial revolution had on British manufactures flooding artisan economies like India 200 years ago is being repeated today. It will be a long long time until We are competitive with Chinese goods.

I think Naomi Klein should be in the International Criminal Court for what she has been up to since 2000. Don't forget, she stoked the anti-globo riots up to some muslim guys took her at her word and flew into the world trade centre, she went quiet for awhile, before emerging and banging on about America has gotta go down, and its an evil place yadda, yadda. Well, she's getting her wish, and the dumb Gen Yers who listened to her and made her a multi-millionaire buying her books, are now lining up for unemployment cheques. Sometimes you get what you deserve...